Uber’s co-founder and chairman, Garrett Camp, has created his own cryptocurrency. (For more, see The Story of Uber.)
Called Eco to refer to the multiple facets of a monetary system – like economics, ecosystem and e-commerce – the project is currently in the design stage with limited programming complete, and Camp is looking for more field experts, scientists, and researchers to get involved in his initiative. He expects to initiate the test-net later this year.
The virtual currency system will be developed and operated by a new non-profit organization, the Eco Foundation. Camp, along with his partners at his startup accelerator Expa, plans to fund the Eco project with $10 million during the initial phase.
How Is Eco Different?
While existing virtual currency public ledgers operate on a network of anonymous miners, Eco’s underlying blockchain ledger will run on “verified nodes,” thereby allowing more reliability to the monetary ecosystem.
It will enable a middle path between the completely centralized currency system (like the present day banking network) and the completely decentralized cryptocurrency system (like the bitcoins).
These verified nodes will be run in partnership with various universities and research institutes across the globe. Though there will be loss of anonymity, the gains achieved in terms of safety and reliability will compensate for it.
The mining process of Eco is also different, paving way for a significant reduction in energy consumption. The present day virtual currency mining process allocates work and incentivizes miners in proportion to their computing power, which leads to the miners trying to outbid each other with more energy consumption.
In Eco’s world, the reward will get equally shared among all users and nodes of the network. Hence, all eligible node runners will be required to do minimal work to find the next block and will get rewarded equally, thereby ending the rat race that leads to more power getting consumed.
New eligible nodes can be added to the network, and inefficient nodes can be removed by a designated group of peers through a unified decision.
The distribution mechanism of Eco encourages participation by a large number of users. The plan is to distribute the first 500 billion tokens to the first 1 billion users. A total of 1 trillion tokens are expected to be mined over the next several years.
Camp joins a list of many entrepreneurs who have jumped on the cryptocurrency bandwagon recently.
Earlier this year, Facebook Inc (FB) CEO Mark Zuckerburg expressed his interest “to go deeper and study the positive and negative aspects of” trends like encryption and cryptocurrency. Leaders and founders associated with businesses like Overstock, Telegram and Kik are making news with their respective plans for launching their own ICOs. (For more, see Overstock Goes ‘All In’ on Bitcoin, Stock Climbs 300% In 2017.)
If Eco actually materializes into what it promises, it may change the world of virtual currencies by acting as the much needed bridge between the fully regulated and fully unregulated monetary systems.
Investing in cryptocurrencies and Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns no cryptocurrencies.